Illinois’ new remote seller amnesty program may offer a national model for tackling sales tax evasion and suppression. By waiving penalties and interest and simplifying local tax rates, it lowers barriers to voluntary compliance—especially for sellers that may feel trapped in patterns of evasion.
The promising new policy arrives just as states brace for tighter federal aid and potential revenue gaps. While the program is aimed at remote sellers, its design logic is universal and can extract insight from past noncompliance to strengthen future enforcement.
The model also can easily be replicated in other states: Lower the cost of coming clean, provide predictable terms for those that self-report, and receive useful disclosures in return. Fear-based enforcement keeps noncompliant businesses quiet lest the spotlight be thrown on them, whereas intelligence-based policy gives them a reason to step into the light.
If you’ve been using zapper software or other sales suppression tools to shave a few dollars off your sales tax obligations, there is probably one rule you live by: Don’t stop now. Suddenly remitting collected tax on all your sales may seem like throwing a red flag on prior years’ underreporting—if you try to go legit, you might just trigger an audit.
This paradox keeps sales suppression alive. It also opens potential avenues for exploitative point-of-sale and zapper providers to extract higher fees and “service charges.”
But buried in Illinois’ fiscal 2026 budget is a surprisingly well-conceived program aimed at noncompliant remote sellers.
The broader value lies in its structure, which could be extended to brick-and-mortar suppression cases with relatively minimal adaptation. Applying the same policy logic to sales suppression could yield a significant return on investment by improving enforcement intelligence.
If, in a hypothetical future program built on the Illinois initiative, sellers had to explain how they cheated in exchange for amnesty—what tools they used, where the loopholes are, and which enforcement gaps they exploited—they would give states a valuable fraud roadmap. Illinois’ program opens the door to this possibility for other states.
Under the program, remote sellers that owe back taxes can come forward, pay what is owed, and avoid interest and penalties. Because interest and penalties alone can often dwarf the original amount owed, they motivate noncompliant merchants to keep hiding in the shadows.
The program also doesn’t require sellers to reconstruct years of local tax data across Illinois’ more than 1,400 taxing jurisdictions. It sets a flat 9% rate that includes the state’s base of 6.25% and a uniform 2.75% local rate. This is a massive lifeline for merchants that may have been erasing transactions by using suppression tools or neglecting to track where a sale took place.
The equivalent innovation for sales suppression would be a program that let retail merchants come forward with unremitted sales tax—that they collected and never reported—and settle based on a presumptive, mutually agreed-on, cash-to-credit ratio. If a business admits it zapped 30% of its cash sales and explains how it did so, the state could offer a fixed-rate reconciliation: Pay tax on that share, and we won’t question the math.
Such a policy would acknowledge the information asymmetry—states don’t know what was hidden and can only engage in informed guesswork—and place a value on closing that information gap.
What would make initiatives based on Illinois’ new program more than one-off revenue grabs is their potential to act as policy recon missions. If designed well, amnesty can be a source of intelligence and provide a positive return on investment via improved enforcement.
When a seller comes forward to resolve unremitted liabilities and take advantage of a safe harbor, that provides a rare moment when the state has leverage to ask the right kinds of questions:
- How did you do it?
- What system did you use?
- Who sold you the system?
That kind of transparency, whether formalized through written disclosures or collected through interviews, can expose the tools, tactics, and bad actors behind suppression in ways enforcement alone can’t.
A retailer that agrees to reconcile on a simplified cash-to-credit ratio could also be required to disclose, or provide an image of, all software used, settings tweaked, and systems exploited. One disclosure by a retailer looking to come clean can inform enforcement against dozens of others.
This effectively turns a reactive audit process into a proactive one—shifting from random audits of establishments to informed enforcement against known suppression tool providers.
States don’t need to build a criminal case against every suppressor. In the long run, they’d likely wind up spending more on enforcement than they can recoup from low-margin retailers.
Revenue authorities must better understand the ecosystem, from how the tools work, to who sells them, and what blind spots exist in their existing enforcement systems. Used wisely, amnesty can help draw that map.
The Illinois remote seller amnesty isn’t just a well-structured program for one specific state tax compliance issue; it’s a veritable policy prototype. It shows how states can increase revenue, curtail underground evasion activity, and learn how they’re being cheated.
States that are serious about cracking down on sales tax evasion must offer a way back in for establishments caught in the compliance paradox. At the same time, they can’t afford to hand evaders a blank check. Offering a trade—amnesty for some money and information—turns every disclosure into actionable information and every settlement into a case study in enforcement vulnerabilities.
Andrew Leahey is a tax and technology attorney, principal at Hunter Creek Consulting, and practice professor at Drexel Kline School of Law. Follow him on Mastodon at @andrew@esq.social
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